Malta Fines OKX €1.1M for Money Laundering Lapses

Crypto exchange OKX has found itself in hot water again—this time in Malta. The island nation’s Financial Intelligence Analysis Unit (FIAU) has fined the exchange €1.1 million (around $1.2 million) after uncovering “serious and systematic” failures in an anti-money laundering (AML) compliance review.

The watchdog carried out a routine inspection in April 2023 and said OKX’s local arm didn’t meet several AML standards. Among the issues flagged: the company’s business risk assessment didn’t properly identify money laundering threats tied to its services. Even worse, OKX reportedly skipped risk checks on nearly half the client files reviewed. The FIAU also highlighted weak transaction monitoring and a lack of proper reporting of suspicious activities.

OKX responded by saying it has stepped up its compliance efforts over the past two years, including tech upgrades and tighter monitoring systems. A spokesperson noted that the FIAU even acknowledged the exchange’s voluntary corrective steps.

Still, this isn’t the first time OKX has been in regulatory crosshairs. In late January, the Malta Financial Services Authority hit the exchange with another fine—this one for €304,000 for breaching other, unspecified rules. As part of that case, OKX agreed to bring in an independent reviewer to assess its internal controls.

The problems go beyond Malta. Just weeks ago, OKX’s parent company, headquartered in the Seychelles, paid more than $500 million in a U.S. settlement for operating without the proper money transmitter license. Thai authorities also filed a criminal complaint in March, accusing OKX of running an unlicensed business there.

European regulators are also reportedly investigating how hackers used OKX’s Web3 tools to launder funds from a $1.5 billion hack on rival platform Bybit. Following the report, OKX temporarily shut down some services linked to the breach.

In the middle of these legal woes, the company is reshuffling its leadership. Earlier this month, it appointed Linda Lacewell, a former New York financial regulator and advisor to Andrew Cuomo, as its new chief legal officer.

OKX may still be expanding in Europe—it recently secured a Markets in Crypto-Assets (MiCA) “pre-authorization” in Malta and plans to offer services across the European Economic Area. But with fines piling up and watchdogs closing in, it’s clear the road ahead won’t be smooth.